TOR-Torentco Lease Agreement: COPEC-GH Mounts Fierce Resistance Against "Shady" Deal

• Petroleum industry think tank COPEC-GH has mounted fierce resistance against the proposal to lease the Tema Oil Refinery to Torentco, a private firm
• COPEC-GH executive director Duncan Amoah told YEN.com.gh that Torentco does not have the demonstrable capacity to manage the multimillion-dollar state refinery
• He put forth many arguments during an exclusive interview with YEN.com.gh that the deal does not make sense and reeks of corruption

An influential think tank in the downstream petroleum sector, the Chamber of Petroleum Consumers Ghana (COPEC-GH), has urged the government to heed the calls to freeze a proposal to lease the Tema Oil Refinery (TOR) to Torentco Asset Management.

COPEC-GH executive director Duncan Amoah said the deal fails the test of basic due diligence and would further worsen the problems of the strategic state oil refinery.

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Amoah told YEN.com.gh in an exclusive interview that the private company that has been chosen on the blindside of the public and other stakeholders does not have demonstrable capacity to take over the multimillion-dollar state refinery.

"You cannot say that for an entity [TOR] whose equity runs into millions of dollars, you will not allow for competitive bidding; you will not allow for people with proven track records to come in. But you are just limiting everything to a company formed on January 1st 2023 to take over TOR.

"If anybody goes ahead to do this, it will be fiercely resisted because Torentco has no proven capacity whatsoever," he berated the government.

The controversial TOR-Torenco deal

The board of TOR has sought approval from the Public Procurement Authority (PPA) to give the green light for the main production assets of the refinery to be leased to Torentco.

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A report by IMANI, a think tank that is also against the deal, explains that under the deal, TOR’s primary production assets would be leased to Torentco for six years.

During this lease period, Torentco would be in charge of TOR's refining operations within the agreement period.

Torentco will refine up to 8 million barrels of oil per year and pay $1 million annually to the state as rent.

TOR-Torentco deal does not make sense

Duncan Amoah told YEN.com.gh for such a deal, the partner must have the economic, material and technical capacity. Torentco, he stressed, does not have these.

"If Torentco was an existent oil operator, a giant in the sector, that has done the job over and over it would be evident. You can check what they've done...it is clear that a few Ghanaians saw an opportunity to register a company with a stated capital of GH¢500,000 Ghana cedis [less than $50,000], and now want to use that company to take over a national asset whose value runs into hundreds of millions of dollars, not cedis. It doesn't really make sense," he said.

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He said considering the complex long-standing challenges at TOR, a deal that purports to turn the refinery around must be steeped in prudence and clear doubts about possible underhand dealings.

"The earlier our officials think about the Ghanaian economy, the wider implication, the better. The government must allow those qualified; those with the technical, material and economic firepower to come in," Dunacan Amoah advised.

Ghana's economy showing signs of stabilisation

YEN.com.gh has reported in a separate story that an IMF staff team has concluded that the economic recovery signs for Ghana look good so far.

In a statement issued on Friday, June 15, 2023, team leader Stephane Roudet explained that Ghana's economy is showing signs of stabilisation amid declining inflation.

But the team urged Ghana to fastrack its debt structuring with its creditors since that was crucial for the progress of the ongoing $3 billion IMF bailout programme.

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Source: YEN.com.gh